U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-QSB
(Mark One)
X...Quarterly report under section 13 or 15(d) of the Securities
Exchange Act of 1934 for the quarterly period ended September 30,
2000.
....Transition report under section 13 or 15(d) of the Securities
Exchange Act of 1934 [No Fee Required] for the transition period
from _________ to _________.
Commission File No: __000-23561__
SUNBURST ACQUISITIONS IV, INC.
---------------------------------------
(Name of small business in its charter)
Colorado 84-1431797
---------------------- -----------------------
(State or other (IRS Employer Id. No.)
jurisdiction of Incorporation)
6363 Sunset Blvd., Suite 910 Hollywood, California 90028
-------------------------------------------------------------------
(Address of Principal Office) Zip Code
Issuer's telephone number: (323) 769-8507
Check whether the issuer (1) filed all reports required to be filed by
Section 13 or 15(d) of the Securities Exchange Act during the past 12
months (or for such shorter period that the registrant was required to
file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
Yes __X__ No _____
Applicable only to issuers involved in bankruptcy proceedings during
the past five years
Check whether the issuer has filed all documents and reports required
to be filed by Section 12, 13 or 15(d) of the Exchange Act after the
distribution of securities under a plan confirmed by a court.
Yes _____ No _____
Applicable only to corporate issuers
State the number of shares outstanding of each of the issuer's classes
of common equity, as of the latest practicable date. At 10/18/00 the
following shares of common were outstanding: Preferred Stock, no par
value 0 shares; Common Stock, no par value, 9,070,831 shares.
Transitional Small Business Disclosure Format (Check one):
Yes _____ No __X__
PART 1 - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS AND EXHIBITS
(a) The financial statements of registrant for the
three months ended September 30, 2000, follow. The financial
statements reflect all adjustments which are, in the opinion of
management, necessary to a fair statement of the results for the
interim period
presented.
SUNBURST ACQUISITIONS IV, INC.
(A Development Stage Company)
FINANCIAL STATEMENTS
Quarter Ended September 30, 2000
<PAGE>
CONTENTS
Balance Sheet F-1
Statements of Operations F-2
Statements of Cash Flows F-3
Notes to Financial Statements F-4
Sunburst Acquisitions IV, Inc.
(A Development Stage Company)
BALANCE SHEET
September 30, 2000
ASSETS
CURRENT ASSETS
Cash and cash equivalents 15,111
-------
Total current assets 15,111
LONG-TERM ASSETS
Notes receivable 278,000
-------
Total long-term assets
278,000
-------
TOTAL ASSETS $ 293,111
=======
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable 1,215
Notes payable 100,000
Accrued interest 355
-------
Total current liabilities 101,570
STOCKHOLDERS' EQUITY
Preferred stock, no par value; 20,000,000 shares
authorized; no shares issued and outstanding -
Common stock, no par value; 100,000,000
shares authorized; 9,070,831 shares issued and
outstanding 1,221,435
Additional paid-in capital 28,617
Deficit accumulated during the development
stage (1,058,511)
---------
191,541
-------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 293,111
==========
The accompanying notes are an integral part of the financial statements.
F-1
Sunburst Acquisitions IV, Inc.
(A Development Stage Company)
STATEMENTS OF OPERATIONS
<TABLE>
<S> <C> <C> <C> <C> <C>
For the period
From inception For the six For the three
(August 27, 1997) months ended months ended
to September 30, September 30, September 30,
2000 2000 1999 2000 1999
--------- ------ -------- --------- --------
REVENUES $ - $ - $ - $ - $ -
EXPENSES
Amortization 300 - - - -
Banking fees 135 135 - 120 -
Consulting fees 4,935 - - (139) -
General office 876 404 102 21 102
Interest 355 355 - 355 -
Legal fees 16,661 5,661 4,250 581 4,250
Professional fees 29,368 6,105 2,003 4,089 1,623
Rent 1,850 300 150 150 -
Taxes and licenses 177 70 - 70 -
Transfer agent 3,577 730 680 730 580
Travel 277 - - - -
--------- ------ -------- --------- --------
58,511 13,760 7,185 5,977 6,555
Equity in loss of
unconsolidated
subsidiary - - 91,476 - 91,476
Loss on investment 1,000,000 - - - -
---------- ------ -------- --------- --------
Total expense 1,058,511 13,760 98,661 5,977 98,031
---------- ------ -------- --------- --------
NET LOSS (1,058,511) (13,760) (98,661) (5,977) (98,031)
Accumulated deficit
Balance, beginning
of period - (1,044,751) (18,281) (1,052,534) (18,911)
----------- ---------- -------- ---------- -------
Balance,
end of period $(1,058,511) $(1,058,511)$(116,942) $(1,058,511) $(116,942)
=========== ========= ======== ========= =======
NET LOSS PER SHARE $ (0.14) $ (NIL) $ (NIL) $ (NIL) $ (NIL)
=========== ========= ======== ========= =======
WEIGHTED AVERAGE NUMBER
OF SHARES OF COMMON
STOCK AND COMMON STOCK
EQUIVALENTS
OUTSTANDING 7,739,812 9,026,569 49,900,000 7,570,813 49,900,000
=========== ========== ========== ========= ==========
</TABLE>
Sunburst Acquisitions IV, Inc.
(A Development Stage Company)
STATEMENTS OF CASH FLOWS
( Unaudited)
<TABLE>
<S> <C> <C> <C>
For the period
from inception
(August 27, For the six For the six
1997) to months ended months ended
September 30, September 30, September 30,
2000 2000 1999
----------- ------------ ---------
CASH FLOWS FROM
OPERATING ACTIVITIES
Net loss $ (1,058,511) $ (13,760) $ (98,031)
Adjustments to reconcile
net loss to net cash used
by operating activities:
Loss on investment 1,000,000 - -
Equity in loss of
unconsolidated subsidiary - - 91,426
Amortization 300 - -
Accrued interest 355 355 -
Rent expense 1,850 300 150
Stock issued for
consulting fees 4,935 - -
Increase (decrease) in accounts
payable 1,215 (1,466) 5,925
------------ ---------- ---------
Net cash flows from
operating activities (49,856) (14,571) (530)
CASH FLOWS FROM
INVESTING ACTIVITIES
Investment in Prologic
Systems, Inc. (1,000,000) - (1,000,000)
Advances to Hollywood
Broadcasting (278,000) (278,000) -
Increase in organization costs (300) - -
------------ ---------- ----------
Net cash used by
investing activities (1,278,300) (278,000) (1,000,000)
CASH FLOWS FROM
FINANCING ACTIVITIES
Cost of issuing common stock (9,474) - -
Issuance of common stock for
cash 1,239,241 202,500 1,000,000
Capital contributions from
shareholder 5,500 3,000 -
Notes payable 100,000 100,000 -
Preferred stock converted to
common 8,000 - -
------------ ---------- ----------
Net cash flows from
financing activities 1,362,215 305,500 1,000,000
------------ ---------- ----------
NET INCREASE (DECREASE)
IN CASH AND CASH
EQUIVALENTS 15,111 12,929 (530)
CASH AND CASH EQUIVALENTS,
BEGINNING OF PERIOD - 2,182 1,996
------------ ---------- ----------
CASH AND CASH EQUIVALENTS,
END OF PERIOD $ 15,111 $ 15,111 $ 1,466
============ ========== ===========
</TABLE>
The accompanying notes are an integral part of the financial statement.
F-4
Sunburst Acquisitions IV, Inc.
(A Development Stage Company)
Notes to Financial Statements
September 30, 2000
1. Management's Representation of Interim Financial Information
The accompanying financial statements have been prepared by Sunburst
Acquisitions IV, Inc. without audit pursuant to the rules and regulations
of the Securities and Exchange Commission. Certain information and footnote
disclosures normally included in financial statements prepared in accordance
with generally accepted accounting principles have been condensed or omitted
as allowed by such rules and regulations, and management believes that the
disclosures are adequate to make the information presented not misleading.
These financial statements include all of the adjustments which, in the
opinion of management, are necessary to a fair presentation of financial
position and results of operations. All such adjustments are of a normal
and recurring nature. These financial statements should be read in
conjunction with the audited financial statements at March 31, 2000.
2. Notes Payable
In September of 2000 the Company acquired a liability of $100,000 in notes
payable. These notes have been issued in anticipation of a stock conversion,
although no agreements exist at the present. These notes payable are non-
interest bearing, but for the purposes of the financial statements interest
has been imputed at the long term adjusted federal rate of 6.09%.
3. Subsequent Events
On October 20, 2000 the Company and HollywoodBroadcasting.com, Inc. ("HB.C")
announced that shareholders owning in excess of 90% of the outstanding shares
of HB.C have elected to tender their shares in exchange for the Company's
shares.
The exchange of shares will be pursuant to an Agreement for Share Exchange
("the Agreement") into which the Company and HB.C entered on August 15, 2000.
The Agreement calls for Sunburst to acquire an aggregate of up to 35,831,668
shares of common stock of HB.C, representing 100% of the issued and
outstanding stock of HBC, or such lesser number of shares, but in no event
less than 90% of the issued and outstanding stock of HB.C, in exchange for
one share of common stock of Sunburst for each share of HB.C common stock
acquired by Sunburst. In the event that less than 100% of the issued and
outstanding stock of HB.C is exchanged, as soon as practicable after the
Closing, HB.C shall be merged into a subsidiary of Sunburst formed
specifically for the purpose of effectuating a "short form merger" under
Colorado law. Dissenting shareholders shall have rights as provided under
applicable state law.
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR
PLAN OF OPERATIONS.
Plan of Operations
The Company anticipates incurring a loss for the fiscal year as
a result of expenses associated with compliance with the reporting
requirements of the Securities Exchange Act of 1934, and expenses
associated with locating and evaluating acquisition candidates. The
Company anticipates that until a business combination is completed
with an acquisition candidate, it will not generate revenues. It may
also continue to operate at a loss after completing a business
combination, depending upon the performance of the acquired
business.
As a result of the anticipated losses for the fiscal year, the
Company will require additional capital in order to meet its cash
needs for the next year, including the costs of compliance with the
continuing reporting requirements of the Securities Exchange Act of
1934, as amended.
No specific commitments to provide additional funds have been
made by management or other stockholders, and the Company has no
current plans, proposals, arrangements or understandings with respect
to the sale or issuance of additional securities prior to the
location of a merger or acquisition candidate. Accordingly, there can
be no assurance that any additional funds will be available to the
Company to allow it to cover its expenses. Notwithstanding the
foregoing, to the extent that additional funds are required, the
Company anticipates receiving such funds in the form of
advancements from current shareholders without issuance of additional
shares or other securities, or through the private placement of
restricted securities rather than through a public offering. The
Company does not currently contemplate making a Regulation S
offering.
As of May 10, 2000, the Company entered into a non-binding
Letter of Intent in connection with a proposed business combination
transaction in which the Company would acquire all of the issued and
outstanding stock of HollywoodBroadcasting.com, Inc., ("HB.C") a
Nevada corporation, by exchanging one share of its common stock for
each outstanding share of HollywoodBroadcasting.com.
On August 15, 2000, the Company entered into an Agreement
for Share Exchange with HB.C whereby the company would acquire
all of the issued and outstanding common shares of HB.C. In
anticipation of its business combination with HB.C, the Company
sold 270,000 shares of its common stock for proceeds of $202,500,
and has received loans in the amount of $100,000. The Company has
advanced $278,000 to HB.C through September 30, 2000. The Company
anticipates that the loans will be converted to stock upon consummation
of the share exchange transaction.
PART II
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) EXHIBIT 27 - FINANCIAL DATA SCHEDULE
There have been no reports on Form 8-K for the quarter ending
September 30, 2000.
<PAGE>
Signatures
In accordance with the requirements of the Exchange Act, the
registrant caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
SUNBURST ACQUISITIONS IV, INC.
(Registrant)
Date: November 1, 2000
/s/
Theo Sanidas, President
